The Florida Senate today passed House Bill 7123, Taxation. The legislation will deliver broad-based tax relief to families and businesses across the state, with a focus on sales tax holidays that offer a tax savings for Florida families preparing for the upcoming 2019 Hurricane Season and the 2019-2020 school year, as well as several tax relief benefits related to hurricane response and recovery. In total, the bill provides approximately $121 million in tax relief. Additionally, while providing unprecedented overall and per-student funding for K-12 Education, provisions of Senate Bill 2500, the General Appropriations Act, lower the property tax rate that supports funding for public schools.
“Since the Great Recession, the Florida Legislature has worked to reduce the tax burden facing Florida families and businesses in a broad-based and meaningful way. That progress continues this year, including targeted tax relief for the agricultural communities in Florida’s Panhandle devastated by Hurricane Michael,” said Senate President Bill Galvano (R-Bradenton).
“Our 2019 Tax Relief Package offers Florida families a tax savings when they purchase critical supplies in advance of the upcoming hurricane season, while the Back-to-School Sales Tax Holiday provides an important tax savings for parents managing the cost to prepare children for the new school year,” said Senator Kelli Stargel (R-Lakeland), who sponsored the Senate amendment to HB 7123 establishing the specific tax relief opportunities outlined above and below. “I am also pleased to see the Legislature take another step to reduce the business rent tax, which helps the small, local businesses in our communities that lease property.”
Establishes the 2019 Back-to-School Sales Tax Holiday
The legislation creates a five-day “back-to-school” sales tax holiday from August 2 to August 6, 2019, for clothing, footwear, and backpacks costing $60 or less, school supplies costing $15 or less, and personal computers or personal computer-related accessories costing $1,000 or less per item.
Establishes the 2019 Disaster Preparedness Sales Tax Holiday
The legislation creates a seven-day “disaster preparedness” sales tax holiday from May 31 to June 6, 2019, for disaster preparedness supplies. Some examples of tax-free items include: flashlights and lanterns costing $20 or less; radios and tarps costing $50 or less; coolers and batteries costing $30 or less; and, generators costing $750 or less.
Creates Tax Exemptions for Hurricane Michael Recovery
The legislation creates several tax relief benefits related to hurricane response and recovery including:
- Tangible personal property owned and operated by a farm, farm operation, or agriculture processing facility located in Okaloosa, Walton, Holmes, Washington, Bay, Jackson, Calhoun, Gulf, Gadsden, Liberty, Franklin, Leon, or Wakulla County that was unable to be used for at least 60 days following Hurricane Michael will be valued at its salvage value for the 2019 property tax roll.
- Sales tax exemption for building materials used to replace or repair nonresidential farm buildings damaged as a direct result of Hurricane Michael and purchased during the period from October 10, 2018, through June 30, 2019.
- Sales tax exemption for fencing materials used to replace or repair farm fences on agricultural land damaged as a direct result of Hurricane Michael and purchased during the period from October 10, 2018, through June 30, 2019.
- Refund of fuel taxes used for agricultural shipments or hurricane debris removal after Hurricane Michael. The exemption applies to state and local taxes on fuel purchased and used in Florida during the period of October 10, 2018, through June 30, 2019.
Reduces Business Rent Tax
The legislation permanently lowers the sales tax charged on commercial leases. In 2017, the Legislature lowered the six percent tax on the total rent or license fee charged for renting any real property from 6 percent to 5.8 percent. In 2018, the Legislature further reduced the business rent tax from 5.8 percent to 5.7 percent. HB 7123 further reduces the business rent tax from 5.7 percent to 5.5 percent. Florida is the only state in the country to impose this type of tax on businesses.
Additional Tax Relief Measures
- Extends the time period insurance companies can make qualifying contributions to a Scholarship Funding Organization.
- Current law exempts transfers of homestead property between spouses from documentary stamp tax when the transfer occurs within one year of marriage. The amendment removes the one-year limitation.
- Exempts from sales tax property purchased by a business for resale that is donated to a charitable organization.
- Further reduces certain traffic fines, from a 9% reduction to an 18% reduction in the fine, when the driver attends traffic school.
Background: As Florida continues to recover from the Great Recession, the Legislature has prioritized broad-based tax relief for Florida’s families and businesses.
2018: House Bill 7087 established Back-to-School and Hurricane Preparedness Sales Tax Holidays, further reduced the business rent tax, and created several exemptions related to hurricane response, preparedness and recovery, while the state budget reduced local property tax rates.
2017: House Bill 7109 established Back-to-School and Hurricane Preparedness Sales Tax Holidays, created a sales tax exemption for feminine hygiene products, and reduced the business rent tax, while the state budget reduced local property tax rates.
2016: House Bill 7099 permanently eliminated the sales tax for machinery and manufacturing equipment, and established a Back-to-School Sales Tax Holiday, while the state budget reduced local property tax rates.
2015: House Bill 33-A permanently decreased the communication services tax (CST) on Floridians’ phones and television services, instituted a Back-to-School Sales Tax Holiday, and among other tax relief measures, eliminated the sales tax charged to returning service members and their families who purchased a vehicle overseas.
2014: House Bill 5601 established Back-to-School and Hurricane Preparedness Sales Tax Holidays; created permanent sales tax exemptions for children’s car seats, booster seats, and bicycle helmets; and provided a nearly $400 million reduction in vehicle registration fees. The legislation reduced certain annual fees paid to register a motor vehicle to the amount paid prior to 2009. In addition to other tax relief measures passed in 2014, this legislation provided annual fee relief to every Floridian who registers a car or truck.